Carlisle Social Investments, LLC

We write to submit the following comments in response to the Securities and Exchange Commission's recently proposed rules, File Numbers S7-36-02 and S7-38-02, concerning proxy voting policies and voting disclosure by mutual funds and investment advisors. We strongly support the recommendations set forth by the SEC, and congratulate the agency for its forward-looking positions on a topic of utmost importance to the investment community.

Carlisle Social Investments, LLC is an independent, SEC Registered Investment Adviser. Our mission is to provide Catholic institutional and individual investors with investment solutions that create an inseparable union between their values or faith and financial performance. Carlisle provides an investment management program that offers indexed portfolios, which are specifically designed, through both screening and advocacy, to comply with the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops. Proxy voting is an important component of this process. We also participate in corporate responsibility and governance issues through our Associate Membership in the Interfaith Center on Corporate Responsibility and membership in the Social Investment Forum.

We support Rule S7-36-02, and feel it is a major step forward in providing transparency for investors. This rule is also consistent with recent SEC moves designed to increase transparency in financial filings and transactions. The SEC is making a clear statement that proxy voting is a fiduciary duty and should be exercised with the best interests of investors in mind. The SEC must also realize that investment advisors cannot fully protect their client's interests when mutual fund proxy voting information is not fully disclosed or readily available.

It is of increasing concern to some investors (both individual and professionals) that there is no way of knowing how most mutual funds voted on key corporate governance and social issues.

Rule S7-36-02 would better enable shareholders and their advisors to monitor mutual funds' involvement in corporate governance, compensation, and social policy activity at companies. The proposed amendments would encourage mutual funds to be more actively engaged in the companies they hold, instead of passive institutional investors.

HOW THIS RULE BENEFITS INVESTORS:

As an investment advisor, we are in many cases the final line of defense for the institutional or individual client from corporate wrongdoing. It is difficult for the investment advisor to protect investors from mutual funds or separate account managers who have a practice of voting proxies inconsistent with good governance when there is not full disclosure and transparency of proxy votes.

When investors search for low cost index or passively structured funds that meet their overall asset class needs, they should also be able to evaluate proxy voting policies. This policy would force mutual funds to take their proxy voting role more seriously with the increased transparency. With proxy voting guidelines as another research tool, investors will be able to better protect their interests.

Spotlights conflicts of interests that may exist between fund companies that vote with management at corporations, where they have 401(k) or other business.

Provides investors with ways of distinguishing fund companies, including identifying those that have strong corporate governance or social responsibility engagement guidelines.

Forces fund managers to treat the proxy as a client asset.

It is in the best interest of the investor for the SEC to move forward with this new rule!

RESPONSE TO INDUSTRY ARGUMENTS AGAINST THIS RULE:

Such disclosures are not costly or cumbersome to mutual fund companies--small funds with fewer resources and revenues have been doing this for years.

The largest public pension in the world, CalPERS, also discloses its votes and guidelines (since 1999), even though it deals with thousands of companies and proxy votes each year. It does this through web site databases, and hard copy disclosure on request.

Many mutual funds and large institutional investors already engage companies in serious positive dialogue, yet are able to still vote against management on issues without destroying that relationship.

Most fund companies already have web sites, and could easily reach the bulk of their investors through web disclosures, which is low-cost.

Funds should already be internally keeping track of votes, so it's just a matter of converting existing data to new fields for web interface.

The surprise opposition to this rule by one of the largest investment organizations ignores the fact that confidentiality should be protected for the individual investor, not hidden from the investors that this organization and others like it ultimately represents through a fiduciary role.

Comments Regarding File No.S7-38-02 :

Proxy Voting By Investment Advisers

Under this rule, investment advisers are expected to create policy guidelines to disclose to clients how they will vote on given proxy issues. Advisers are also to keep adequate records of their voting in order to provide transparency to clients when requested. Because investment advisers have voting authority over $12 trillion in assets, in addition to the $7 trillion controlled by mutual funds, and vote these assets on behalf of their clients, methods for disclosing such votes seems a reasonable request. These assets make up the lion's share of the investment market in the U.S., and yet many individuals and institutions entrusting voting rights and obligations to advisers are left in the dark about how their assets are being used to strengthen a company's bottom line. Transparency regarding voting by portfolio managers is paramount in strengthening corporate governance at U.S. companies. We are one of these Advisers and not only recommend full proxy voting disclosure, we embrace it!

We commend the SEC on its recent efforts to encourage greater disclosure and transparency by mutual funds, including a "plain English" prospectus, and detailed disclosure requirements regarding investment strategies, fees, and risks. The proposed rules concerning disclosure of proxy votes and guidelines is a solid step on the path for true transparency for investors that have indirect control of their assets. Investors feel disempowered and frustrated by the litany of corporate scandals gracing newspapers and television screens. They want to know how their hard-earned monies are being invested for the future, yet are dubious that adequate checks and balances are in place to prevent future "Enron's."

Transparency of action and intent go a long way to alleviate such anxieties. This in turn will help to restore lagging faith in our currently volatile equities markets, and the mutual fund sector.